What is a pty ltd company?

Under Australian law, a proprietary limited company, abbreviated as Pty Ltd company, Pty Ltd, or P/L, is a business structure that has at least one shareholder with a limited number of shares.

Under the governing Australian Corporations Act company must either be:

  • Limited by shares (Ltd), where shareholders are afforded more protection when it comes to the level of liability that they face for company debts; or
  • unlimited, where shareholders face unlimited liability.

The Pty Ltd company must have at least one shareholder and must have no more than 50 non-employee shareholders and at least one director who must live in Australia with an appointed secretary that must be at least 18 years of age. One person may simultaneously hold the positions of company director and secretary.

Proprietary limited companies are also classified as “large” or “small”. A proprietary company is classified as small only if it meets at least two of the following criteria:

  • It has a gross operating revenue of less than $25 million for the financial year
  • It has assets of less than $12.5 million at the end of a financial year.
  • It has fewer than 50 employees at the end of a financial year.

Most large Pty/Ltd company structures have to lodge audited accounts. Small Pty/Ltd companies only have to prepare audited financial statements if ordered to do so by the Australian Securities and Investments Commission (ASIC) or members holding five percent of voting shares and, in some cases, if controlled by a foreign company.

This information can be visited at the Wikipedia site.

To register a Pty Ltd Company simply go to www.companiesnow.com.au/Company-Incorporations.html

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{ 38 comments… read them below or add one }

Gladys September 16, 2009 at 4:56 pm

Can a partnetship with two or three partners from the same family became a company pty Ltd, using the same name as the one listed in the Australian business registration
and can we use the same ABN and name.

What do we need to do this.

regards
Gladys

admin September 17, 2009 at 7:33 pm

Hi Gladys,

Yes you can register a company in that way. You simply advise us that the name is an existing business name and provide us with the ABN and name on the order form.

You can also nominate what roles you want each of the partners to play in the business, such as Directors, secretaries etc. All parties can also be directors if they require or some may choose simply to be shareholders etc.

I hope this helps and if you need any further help dont hesitate to call or email.

Regards
Rich

admin September 17, 2009 at 7:34 pm

Gladys forgot to mention you can access all our information on our website at http://www.companiesnow.com.au

Elissa November 1, 2009 at 5:51 pm

Just wondering how a person would go about entering an existing pty ltd company?

Regards

Elissa

admin November 3, 2009 at 3:14 pm

Hi Elissa,

You will need to complete a form called 484. You can either do it yourself with ASIC and print and send in or a registered agent (either the agent that registered the company or other agents) can complete this for you.

We can help you with this if you want simply send us an email.

Regards
Rich

George November 10, 2009 at 9:17 pm

I work for a Pty Ltd company and recently agreed to be a Director. Can you tell me if I would be liable for any debt incurred by the company. Also, does Australian law determine a renumeration for Director’s duties?

Best Regards,
George

admin November 16, 2009 at 3:13 pm

Hi George,

You can read more about this here Directors and company debt

In regards to the renumeration I am unsure of that, there is a Press release at the Treasures website that may be of help though just go to treasurer.gov,au.

Hope this helps.

Regards

Rich

joan December 9, 2009 at 11:49 am

can a pensioner become a director of a pty ltd company

admin December 9, 2009 at 1:23 pm

Hi Joan,

Yes a pensioner can become a director of a Pty Ltd Company.

Regards
Rich

franz March 3, 2010 at 10:06 pm

Dear Sir or Madam,

is it possible for me as a German resident to acquire 50% in an Australian Pty Ltd and become equal partner and director.
At the moment, the company has only one director who is Australian resident.
Or do I need to hold Australian resident-ship?

I thank you very much in advance

best regards

Franz

steve April 3, 2010 at 8:54 pm

I recently bought shares in a small PTY LTD business as a partner. Is there a time frame as to when i should appear on any appropriate legal documentations that are required to be lodged?
If these documents have not been lodged am i able to void my agreement?

Sue Grant June 9, 2010 at 5:40 pm

Can a director of ” X” Pty Ltd company, take out a loan for another “Y” Pty Ltd company, he is also a director of, against the assets of “X” Pty Ltd company. Would this be a conflict of interest and not be in the best interests of the shareholders.

Lyn July 27, 2010 at 9:36 am

Does a pty ltd company have to incorporate the pty ltd on all its advertising material or only on more legal documents?

Malina Fielder August 4, 2010 at 11:03 pm

I am planning to form a company and sell shares to an investor who will invest money and mannage bussiness with me. I am not sure if I can pay my personal debts with part of money from sold shares and invest rest in a bussiness. Does money I got from payed shares will belong to me personaly or all must be invested in bussiness?
Example if I sell 49% of a company or bussiness for $150000 does it mean that that money goes in my hands and I can do with that money what ever I want?

Emma August 12, 2010 at 10:17 am

Can a Pty Ltd company perform work for an overseas company?

Uttam August 28, 2010 at 1:06 am

Can a overseas citizen be a director in the company?

Dave September 22, 2010 at 1:49 pm

What are the compliance costs of becoming a registered business?

IE: Anual fees for maintaining a PTY/LTD Business? or are the fees just a one off charge?

With thanks

dave

admin September 22, 2010 at 3:00 pm

Hi Dave,

The initial cost for the company is $412 ASIC fee + the costs for the incorporation service and the delivery of the documents (email version $539 or hard copy in the company register $622).

The ongoing costs for your company are its yearly fees with the ASIC. This is a $212 annual fee.

Other than that there are just your associated costs such as accounting etc.

Hope that helps.

Rich

admin September 22, 2010 at 3:01 pm

Yes as long as there is one director that resides in Australia that is fine.
Rich

admin September 22, 2010 at 3:02 pm

As a company you can do business internationally, you may just have to check with regulations if you are importing and exporting etc and seek guidance from your solicitor or accountant regarding your particular business situation?

Rich

admin September 22, 2010 at 3:04 pm

Hi Malina, you may want to consult with your account regarding this situation. We are not accountant’s nor solicitors and each situation will be unique depending upon the agreements within the company structure.
Good luck
Rich

admin September 22, 2010 at 3:06 pm

You do not have to use that with your advertising material etc. We have it on invoices and legal agreements.
Some people will display on certain media if they want there prospective clients to know they are a Company structure.

Regards
Rich

admin September 22, 2010 at 3:09 pm

Ah I will leave that one for your accountant or solicitor! I think there may be some issues there but I recommend you speak with a legal expert on that situation.
Rich

admin September 22, 2010 at 3:11 pm

Yes you have to advice the ASIC if there is any changes to a company within 28 days of the changes being made.

Regarding voiding your agreement speak with your solicitor. From the ASIC standpoint the company can receive fines for not keeping its records up to date.
Rich

admin September 22, 2010 at 3:12 pm

You can hold shares in the company without being an Australian resident.
As long as there is a director residing in Australia that is fine.
Rich

admin September 22, 2010 at 3:13 pm

Hi Joan yes you can.
Rich

Satinder February 13, 2011 at 6:09 pm

Hi,

Do I need ABN or ACN for registering my PTY LTD company with ASIC (Australian Securities and Investments Commission)

admin February 14, 2011 at 9:23 am

Hi when you register a company with the ASIC you will receive an ACN number.

From there if you wish to register for GST you will need to register for an ABN number.
An ABN allows you to:

* facilitate a single Business Activity Statement
* confirm your business identity to others when ordering and invoicing
* avoid PAYG tax on payments you receive
* claim GST credits
* claim energy grants credits
* obtain an Australian domain name.

Regards

Rich

P.SAN June 6, 2011 at 9:52 pm

Can a non-aussie be the majority shareholder 95% of a Pty Ltd and have a aussie Director with minimal shares, i.e 5%? to avoid liability of aussie director on debts…

admin June 7, 2011 at 9:08 am

Yes a non Australian can be a majority shareholder of a Pty Ltd Company. You just need to have
1 director who resides in Australia.

admin June 7, 2011 at 9:10 am

Hi Ray,

If you cannot start a Pty Ltd company due to not having an Australian company then that may be the case.
It would be worth clarifying with the company if you cannot still invoice them through an international company.

admin June 7, 2011 at 9:14 am

Hi Vanessa,

To keep it simple a director must run the company ethically and do his or her best to ensure that the company is run without
doing anything that can jeopardize the business, such as shady business dealings etc.

If the director has managed to do that and the business for some reason stands to be sued or go bankrupt then the liabilities of the
director are only the assets of the company and not their personal assets.

If on the other hand the director was found to have illegitimate dealings then they are likely to expose their personal assets.

admin June 27, 2011 at 7:42 am

Hi Nazrul, Yes you can form a company with your wife as a shareholder or secretary. The minimum shares is 1 share and that share can be as little as .001, on average most of our clients nominate a $1 sahre value.

Ravi Rengasamy September 10, 2011 at 1:29 pm

Having PTY company, do we need to open a diffrent bank account,
If my wife is the director and I am the operational manager can my wife be the secretary as well?
How do we get paid individuly?
Can we buy a car under the company and claim GST/Fuel usages
Regards
Ravi

admin September 12, 2011 at 10:09 am

Hi Ravi,

Thanks for your enquiry. If you are going to invoice through the
company you will need a separate bank account.

Yes your wife can also be the director.

Regarding the distribution of funds you are best to speak with
your accountant as to what is best for your particular situation.

You can purchase a car through a company, there are conditions
that you must adhere to, but again your accountant will be able
to clarify these with you.

Regards

Richard

admin September 12, 2011 at 10:13 am

Hi Lee,

You can have a parent company and then have 2 separate business names
operating underneath it.

In some situations it may be best though to have them totally separate,
so speak with a lawyer or accountant about your goals and position of the
businesses to get the best advice.

Richard

martin July 10, 2012 at 2:01 pm

My wife wants to be part of my company but she just wants to be a shareholder not a director. Is this possible?

admin July 10, 2012 at 2:15 pm

Hi Martin,

Yes she can most certainly just be a shareholder without holding a “office holder” position in the company.

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